Silly Kathy, Health Care Reform is Still for Kids

Let’s spend a few posts on Kathleen Sebelius’ Editorial that is essentially a summary of every argument the Obama Administration will propagate over the next two years.

She continues with:

“Children are now protected from being turned away by insurers because of a pre-existing condition. Seniors enrolled in Medicare now have the freedom to get preventive care — such as mammograms and colonoscopies — for free. A Patient’s Bill of Rights is freeing families from some of the worst abuses of insurance companies, including canceling coverage when you get sick because of a paperwork error.”

Actually everyone is protected from being turned away by insurers for a pre-existing condition. “Children” was thrown in for sheer emotional effect. Most likely because that’s what government policy for 310 million people should be based on – our instinctual feelings for protecting children.

Seniors enrolled in Medicare have the freedom to get preventive care now. Getting that care for “free” is not a new freedom. It unburdens seniors from paying for that care and the cost is then spread out among the rest of the population. The rest of the population includes non-seniors who are simply having their tax money redistributed toward seniors on Medicare as they get “free” preventive care. The fact that seniors vote more often than non-seniors has nothing to do with this, except for… everything.

I’m in favor of banning insurance companies from canceling coverage for frivolous reasons, but this very rarely happened before the law was passed. And we didn’t need 2,300 pages to prevent it from happening in the future.

“Early signs show that, after years of decline, the number of small businesses offering coverage to employees is increasing.”

Let’s see the stats, please. Even if more small business were offering coverage, it will be a short-lived victory for health care reform. The latest Mercer Survey shows that 20% of businesses with less than 500 employees are seriously considering dropping the medical insurance they currently offer the first chance they get – on January 1, 2014 when the state health exchanges for individuals are created.

“During the past year, our department has provided states with almost $250 million in funding to strengthen their ability to review, revise or reject unreasonable rate hikes. New proposed rules would force many insurers to justify big increases and post explanations on the Web. States from California to Connecticut have already shown that vigorous oversight can be effective in stopping unjustified premium increases.”

Wait. $250 million dollars in a year given to insurance administrators employed by the states?

Let’s do some quick math here. The number of electors in each state for the electoral college that determines the winner of the presidential election are determined by the population of each state. So let’s just make the number of insurance administrators that review insurance renewals (“rate hikes”) equal to the number of electors. California with its many cities and businesses would have 55 employees and Alaska with its… uh whatever, would have 3 employees.

That gives us 538 insurance administrators doing nothing but reviewing renewals by insurance carriers to determine “fairness” of the increases. Let’s pay each of them a salary of $160,000 and benefits valued at $40,000 for an even $200,000. That’s $107,600,000 to completely overpay state workers to do a job that takes less than a year to learn and where would the other $140 million go? This is a task that could be done for $50 million or less.

I do believe that it may be appropriate for states to review health coverage increases for individuals (and possibly small businesses). But that’s all they would need to review. The renewal increases for employer groups are reduced by private-sector brokers and consultants who negotiate with the insurance companies on behalf of their clients.

It must be hard for the Obama Administration to believe that when certain companies do something that its customers dislike the result might be enterprising citizens reacting by creating companies that counteract that movement of money in what is perceived to be an adverse direction. It’s as if consumers get disappointed and demand a market be created to compete with current suppliers.